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Benefits Managers Can Slow Pharmaceutical Deliveries

When you go to the pharmacy, you expect whoever’s behind the counter to fill your prescription, right?

But a fight between pharmacists and the half dozen big companies that manage prescriptions is leaving some patients empty handed — and sometimes in serious pain.

As Kristian Foden-Vencil reports, the Oregon Legislature was looking at a bill to address the issue. But the idea is dead — at least for now.


Portland pediatrician Ben Hoffman had surgery on his knee last fall. It was for an old soccer injury that left bone rubbing on bone.

After going under the knife, he was given a prescription for oxycodone and then discharged for the evening.
The plan was for his wife to drive him home via the local Walgreens to pick up the pain killer.

“I was on crutches and still pretty out of it. So we stopped at the pharmacy, my wife dropped off the prescription, then brought me home. Bundled me into bed and then we got a phone call about 15 or 20 minutes after we arrived home from the pharmacy, telling us they couldn’t fill the prescription because they no longer took our insurance,” Hoffman said.

Now that doesn’t mean he didn’t have insurance. He did. But he found himself caught in the middle of a battle between his insurance company, his pharmacist and a relatively unknown entity: his “Pharmacy Benefit Manager.”

“That left me at home without any pain medication and no way to get it for about 24 hours. I finally got pain meds at about six o’clock the next night.”

Let me jump back for a moment — to the “Pharmacy Benefit Managers.”

PBMs are like middle men, who negotiate on behalf of health insurance companies for cheaper drugs.  They’re actually a handful of very large companies.

If you have a health insurance card, pull it out and you may see a PBM’s name on it: Medco, Express Scripts, or Caremark.

Charles Cote of the Pharmaceutical Care Management Association, says PBMs cut the cost of health care.

“We save on average about 35 percent and in Oregon, PBMs will save consumers and payers about $20 billion in prescription drug costs over the next decade,” Cote says.

Cote is one of close to a dozen lobbyists hired by PBMs to work in Salem to oppose the bill. As part of that effort, the PBMs did a significant ad buy.

“We’re running this ad campaign to educate key Oregon decision makers about the important safety and savings benefits PBMs provide.”

Now, back to Ben Hoffman and his dodgy knee.

“I’d known about PBM’s being a physician but it was the first time that I’d ever been confronted by a decision made by a PBM made in terms of their contract with a pharamacy that was not relayed in anyway to me or my insurance company as far as I knew.   And I’d previously been able to pick up prescriptions from that chain of pharmacy.  So finding out at 10 o’clock at night after a knee surgery requiring pain medication was sort of an unfortunate circumstance,” Hoffman says.

Shelly Bailey says pharmacy benefit managers are so big they can simply dictate their own terms.

Kristian Foden-Vencil / OPB

Hoffman is not alone. An increasing number of Oregonians haven’t been able to get their prescriptions filled according to policy makers.

Pharmacy owners  say they’re having problems too.

Shelly Bailey runs Central Drug in downtown Portland. She says Pharmacy Benefit Managers are so big, they can simply dictate terms.

“We fill prescriptions below our cost to dispense, hundreds of them a day… And when we report those to the PBM, we’re told just hey, you can choose to fill those scripts or not participate in our network,” Bailey says.

Democratic Senator Alan Bates, who is also a doctor, says what’s happening is that the PBM’s are gradually squeezing brick-and-mortar pharmacies out by pushing people to get medications directly from PBMs — via the mail.

“It’s kind of like the creaming of things. They’re taking the easy cases, the easy money and leaving everything else to pharmacies, and giving pharmacies, like Walgreen’s and others, reimbursements they can’t live with. It’s below the cost of the drug that Walgreen’s is purchasing. We have to have some transparency here. we have to understand where the money is going in PBMs,” Bates says.

Bates and a group of Republican and Democrat lawmakers, from both the House and the Senate, wrote a bill to make PBMs get licenses from the State Board of Pharmacy.

It would have allowed the board to examine the financial reports of the PBMs. And that, says PBM lobbyist Charles Cote, would be like letting the fox guard the hen house.

“I mean you’re letting a pharmacist regulate those who negotiate their payments. That’s a conflict of interest because then the pharmacy knows what their competition is charging and how they’re lowering costs and then they in turn, once they have that information, can raise their costs and the prices they charge.”

Portland Democrat, Jules Bailey, says the bill had protections — so if pharmacists serving on the board had a conflict of interest, they would have to recuse themselves.

And he insists, transparency is essential.

“We want to be able to see those contractual relationships between the insurer and between the PBM and the retail pharmacist to see that they’re not keeping things like drug rebates that they need to be passing through. And making sure that the state is able to manage for access, for safety and for quality,” according to Bailey.

But the pharmacy board isn’t going to be getting a look at any of those contracts any time soon.

The House Health Care Committee killed the bill — at least for this session. Co-chair, Mitch Greenlick, another Portland Democrat, says the bill fell afoul of the general agreement not to work on anything with heavy opposition during the short session. But, he says, stay tuned for next year.

“Absolutely it’s not dead. There’s a ton of money in this and the pharmacy benefit management organizations have hired half of the contract lobbyists in the building to fight it. So it’s not going to be easy. But we hope we get a work group and get them involved and move the ball down the field a little bit,” Greenlick says.

Meanwhile, if you’re expecting to go under the knife,  you might want to get your pain meds sorted out beforehand.

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